Sometimes coming up with sound investing ideas can be a challenge. If you’ve got some cash to invest and are looking around for a home for your green, here are a couple of investing ideas you could consider.
First, off you could consider putting some money in Yahoo, Inc. A lot of ink has been spilled over the company’s new CEO, Marissa Mayer. However it looks like she’s been making some favorable moves. The company has been losing money on search and content applications, but Mayer has been acquiring smaller start ups in order to build up yahoo’s talent pool. She’s also focused the business more heavily on mobile applications, on content provision and has deprioritized search.
YHOO is only marginally profitable, and its last quarterly reports showed a 7% earnings decline and a 2% increase (1, 2), respectively. Investors don’t seem to care about the marginal finances of the company – the stock has risen from $15.98 when Mayer came on about a year ago, rising to $27.96 today.
The way to make some money off this would be a short term momentum trade. That is, jump in and hold for a couple of months while waiting for the price to go higher. The company is still trading at a P.E. of 7.6 – so there might be some room for growth in the price. That said, YHOO doesn’t seem like a good long term bet. Mayer’s new business model hasn’t proven that it can turn Yahoo around. So this would be a strictly short term hold.
Second, you could trust your money with Donald Yacktman. If you haven’t heard of Yacktman, he is one of the original value investors. These are the guys who like to buy a dollars worth of stock for 80 cents. Born in 1968, Yacktman is the CEO of Yacktman Asset Management and had a long history of successfully managing mutual funds. In 1991 he was Morningstar’s Portfolio Manager of the Year. Most recently his fund – appropriately called The Yacktman Fund – has beaten the socks off the markets. Over the past 4 years Don’s funds have seem something like 30 fold returns (1). Its hard to do better than that – I’d be smiling too!
So how can you make money from this? Consider taking a position in one of Don’s mutual funds. The ticker symbols are YACKX and YAFFX. The minimum investment for both is $2,500. You’ll want to know more before pulling the trigger, so CNN Money has a pretty good write up.
If you have any ideas you’d like to share, feel free to leave a comment. We’d love to hear about them.